Everything You Need To Know About Netherlands Employment Law

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Gino Peters

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Gino Peters

Reviewed By: Belinda E.

June 3, 2026 8:18 pm

Category Tag: News

The rise of remote work made international expansion much easier in recent years, but hiring abroad still comes with legal and administrative complexity, as every country has its own labour laws and payroll rules that must be followed. In addition, not many companies can open a new entity in every new market that they are expanding into. That is when the Employer of Record (EOR) solution comes in handy.

The EOR serves as the legal employer on paper, while the client company manages important activities related to the employees responsibilities and performance.

In this guide we will cover what an employer of record is, how it works in detail, how much it can cost and which business should consider an EOR solution.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third party service provider that legally employs a person on behalf of another company in the country where the employee officially resides. As an official employer the responsibilities of EOR include issuance of an employment contract, processing payroll and withholding taxes and necessary social security contributions, as well as preparation of offboarding documents or any documentation that need to be signed by the employer. In addition, EOR ensures the compliance with local labour laws and serves as a first point of contact for any legal disputes.

The client company that hired the employee through an EOR also has a list of responsibilities. As an Employer of Record does not have the visibility on operational activities behind the scenes a client company needs to provide direction and ensure proper team integration.

In simple terms, the EOR provider acts as a legal employer in the country of the employee’s residence, while the client company takes on day-to-day manager work.

Responsibility	Employer of Record (EOR)	Client Company
Employment contracts & any other official documentation
Payroll processing
Income tax & social security contributions
Compliance with local labour laws
Statutory benefits administration
Managing daily work and projects
Setting goals and performance expectations
Providing equipment and tools
Leading the employee’s team and workflow

Employer of Record solutions gain more and more popularity in the field of global expansion as they allow businesses to hire best candidates fast and easy while staying compliant with local employment regulations. More information about EOR service are available if you would like to understand more.

EOR Meaning

The term “EOR” is the abbreviation for Employer of Record.

Employer in this instance stands for the company that hires the employee and takes on duties related to it, such as onboarding and offboarding process, payment of wages and compliance with other legal requirements.

“Record” from the EOR perspective refers to official registration with government authorities. The name of the EOR provider is stated in all payslips and tax filings, and should also be listed by the employee in any documents where employer must be stated, such as mortgage or loan applications.

One might ask a question of why this legal structure exists. As it is not possible to provide an employment contract directly to a person that legally resides in another country, the business expanding abroad typically needs to establish a local entity. That involves legal registration, arrangement of local bank accounts and organisation of payroll structure, as well as compliance with local law.

EOR allows to simplify the global hiring and reduce administrative burden through their existing legal entity.

There are some other hiring models that can be confused with EOR.

EOR and PEO

Many sources online refer to EOR as “international PEO”, which may create confusion as these models have 1 important difference.

A Professional Employer Organisation (PEO) serves as a co-employer of a client company. In other words, a business must already have an established entity in the country. The hiring tasks are, therefore, shared between 2 companies, while legal liability stays only with the client company. In the EOR model all legal risks are being taken by the official employer. Read more about the difference between PEO and EOR here.

EOR and staffing agency

Staffing companies mainly provide assistance for short-term projects by providing temporary workers. If the client wishes to employ a person for a longer time, EOR approach must be chosen.

EOR and contractor model

Contractor agreements assume the involvement of independent workers rather than employees. This model is also often used for temporary, project-based assignments. It is important to remember that there is a big misclassification risk between a contractor and an employee in the company which can lead to potential legal issues. An EOR ensures that employment is legally compliant with local labour law.

How does an Employer of Record work?

While it may sound complicated at first, a process behind the employer of record model is relatively straightforward.

The operating company selects a candidate

The client company recruits the employee they want to hire in another country

The EOR becomes the legal employer & local employment contract is issued

The Employer of Record uses its local legal entity to prepare and issue an employment contract that complies with labour law of the country where the employee is based. Depending on case-by- case situation, the work visa might need to be secured beforehand. Our company provides immigration services, more details can be found here.

Payroll and taxes are managed

The EOR takes on recurring responsibilities related to a payroll and ensures correct processing of income tax, social security contributions etc

Benefits are administered

Paid leave, sick leave, pension contributions and any other statutory benefits are being managed by the EOR.

Ongoing compliance and HR support

It is the responsibility of the EOR to monitor changes in local labour law and ensure ongoing compliance.

Example:

Imagine a UK-based tech company found a perfect candidate in Germany for a position of a software developer.

Instead of going through the administrative burden of opening a legal entity in Germany, the company chooses to work with an Employer of Record. The EOR hires the developer under a German employment contract and manages payroll and taxes. At the same time the UK company welcomes the new employee in the team and manages the daily work of a developer.

What services does an Employer of Record provide?

The Employer of Record does more than just providing an employment contract to the employee. Typically a wide range of HR and compliance services is included in the EOR offer. For example, read about the services included in our EOR package here.

Employment and HR administration

Locally compliant employment contracts and support with other documents requested by authorities
Employee onboarding
Employee record management. For example, control over PTO

Payroll and tax management

Regular payroll processing
Tax withholding and reporting of social security contributions with authorities
Payslip generation and creation of annual wage tax certificates

Benefits administration

Management of statutory benefits
Pension contributions (where required)
Support with benefits such as maternity leave allowance, sick leave allowance etc

Compliance and risk management

Insuring compliance with local labour law
Management of onboarding and offboarding processes
Representation in difficult legal and court cases

Additional services:

Some EOR providers ( such as ThisWorks EOR Services) provide additional services such as:

Work permit and dependent visa support
Background checks
Relocation support
Value added services: support with housing, company car, banking, etc ( depending on the country).

This vast list of services allows businesses to manage international teams, while staying compliant and avoiding complex local employment administration.

Benefits of using an EOR service

There are multiple advantages the businesses can get from working with an Employer of Record provider.

Faster global hiring

Setting up a new entity can take up to several months. With an EOR the hiring process can take several days.

Reduced compliance risk

A trustworthy EOR provider ensures the compliance with all local regulations. As the labour law varies greatly between countries, having a knowledgeable party to rely on can make a big difference.

Lower expansion costs

Establishment of a new entity is not only a time-consuming process, but also costly. With EOR services these costs can be avoided.

Access to global talent

The location of a remote candidate is not a problem if the company uses Employer of Record services. In other words, the best candidate for specific business purposes can be chosen.

Scalable hiring model

EOR services are ideal for organisations that want to scale international hiring quickly. They are particularly useful in the following situations:

Remote-first teams and organisations
Companies testing new markets abroad
Startups expanding internationally

How to choose the right Employer of Record

Choosing between several EOR providers is important, as it influences not only compliance, but also employee experience for new hires and how your company is perceived on the job market.

Here are some important things to keep in mind when deciding on your EOR partner:

Geographic coverage

Make sure that EOR provider can cover the country where you want to expand globally. Read about our EOR coverage here.

Pricing transparency

Check that EOR provider does not have any hidden costs and the pricing is clearly outlined in your MSA.

Compliance expertise

A strong EOR provider should have a team of experienced local HR specialists who understands all in and outs of a national labour law.

In-house vs partner model

Some EOR providers rely on their third-party partners, while others manage employment directly through their own local entities.

Customer support

It is important to find a EOR partner that helps with any questions or concerns in a quick and professional manner. That can be crucial when dealing with employee offboarding or any legal disputes.

Warning signs

Understanding the importance of choosing a right party, your company should be cautious of providers that lack local expertise and cannot give clear answers to your labour law questions. In addition, companies with slow response times can prove to be unreliable in critical situations. Furthermore, providers with complex pricing models with many hidden fees can create a lack of cost transparency and result in unforeseen expenses.

By selecting a provider with strong expertise in local labour law and reliable support from dedicated teams, your company can ensure a smooth international growth. Learn why companies choose ThisWorks as their EOR partner.

How much does an employer of record cost

The vast coverage of services the employer of record provides makes many businesses ask how much an EOR costs.

Pricing models vary greatly on the provider and the country of coverage, but most EORs use one or more of the following structures.

Flat monthly fee per employee.

The EOR provider charges a fixed monthly fee for each employee they have on the payroll from the client.

Percentage of salary

While not being a popular approach, some EOR providers charge a percentage of the employee’s salary, typically ranging between 5%-15%.

Setup fees

Some providers charge onboarding or offboarding fee for each employee.

The fee that the business needs to pay to an EOR provider also depend on the location of a service. Local labour law complexity of some countries can influence the fee. In addition, some countries have specific statutory benefits and payroll administration requirements. Furthermore, employee headcount in the specific location can influence the fee.

EOR vs setting up a legal entity

To establish a new entity the organisations needs to go through legal and tax registration. In addition, accounting support and ongoing compliance costs such as the fees for local labour lawyers can make setting up a legal entity significantly more expensive.

An EOR allows companies to expand globally without these upfront investments.

EOR vs hiring contractors

Some businesses decide to hire international workers as contractors. However, this approach can often lead to a misclassification risk, which can cause legal and tax liabilities.

A professional EOR provider ensures that the new starters are compliantly onboarded under local employment regulations.

EOR FAQs

Is an EOR the same as a PEO?

No. PEO model assumes co-employment and requires the business to already have established local entity, while EOR employs new talents through its own entity only.

Can an EOR hire contractors?

While some EOR providers can support hiring contractors, it is important to remember that main function of EOR is the employment of full-time workers legally in a country. A risk of misclassification between EOR and contractor should be also considered carefully.

Is an employer of record legal?

Yes, when established and structured properly, Employer of Record entities are legal and widely used for international expansion by many companies.

When should you use an EOR?

The most common reason for using EOR include:

Hiring employees located in another countries remotely
Testing new markets before establishing an entity
Expanding internationally

Can you switch from EOR to your own entity?

Yes. Many companies initially hire through an EOR for the ease and speed of expansion and later transition employees to own legal entities upon their establishment. It is important to remember that some countries require specific procedure to be followed in such a scenario.

Get in touch with ThisWorks

Expanding your team globally does not need to be long and administratively complex.

With the use of Employer of Record the businesses can have access to the best talent from around the world while ensuring full compliance with local labour laws.

ThisWorks can support your global expansion with our compliant Employer of Record services.

Contact our team to find our how we can help your international team glow fast and compliantly!

Netherlands Employment Law: Unraveling probationary periods, contracts, and collective agreements

If you are going to start working in the Netherlands or if you are an employer, understanding Dutch employment law is highly important. This law outlines the rights and duties within the workplace. It clarifies all your doubts about probationary periods, contracts, and collective deals. Probationary times offer a chance for both parties to measure suitability. The Dutch employment law probationary period termination rules ensure fairness in this trial phase. Moreover, the Collective Labor Agreement’s influence on probation periods sets standards that protect workers while allowing flexibility for employers.

Changes in probationary periods since 2015 in Dutch contracts have also changed the work dynamics and legal factors. Additionally, knowing the highest probationary time duration in the Netherlands is important. It guarantees compliance with national standards, promoting an open and fair workplace. This article dives into these aspects, giving insights into adapting to the Dutch workplace. It aims to explain the complexities of Dutch work law. Thus, empowering you to handle your career journey in the Netherlands with confidence.

Probationary Periods in the Netherlands

In the Netherlands, probationary times are a test step in a job. They let both the boss and the new employee see if they fit well together. This time is like a trial run before making the job official. The law sets rules for these trial terms. The highest probationary time duration in the Netherlands depends on the contract length. Short contracts have faster trials. This balance ensures no one is stuck in a trial phase for too long. Also, Dutch employment law probationary period termination allows stopping a job during this time without a long process. This can happen if either side thinks the match is not right.

Yet, the rules are clear to protect both parties from unfair treatment. Changes in probationary periods since 2015 in Dutch contracts have made work life better. These changes help everyone know what to expect right from the start. The Collective Labor Agreement influence on probation periods has set different rules for certain jobs. These agreements between unions and companies can change the standard probation rules to fit particular work areas better.

Understanding these basics helps both workers and bosses manage the start of a work relationship with clarity.

What are the Limitations and Duration of Probation Periods in the Netherlands?

Maximum Allowed Durations

In the Netherlands, the highest probationary time length depends on the type of contract. For open ended contracts or for fixed term contracts longer than two years, the probationary period can last up to two months. For contracts lower than two years, a one-month trial phase is common. This system ensures both parties have sufficient time to assess the job fit.

Restrictions and Exceptions

There are clear limits and workarounds to these rules. Notably, probationary times exceeding the legal limit are not valid and can lead to instant firing rights for the employee. Additionally, since 2015, contracts shorter than six months cannot include a probationary period, showing a major change in probationary periods in Dutch contracts. This change aims to protect employees in short-term work from undue job instability.

What is the Impact of Collective Labor Agreements on Probationary Periods?

Collective Labor Agreements (CLAs) greatly affect trial period terms, going beyond basic law rules. These agreements come from talks between unions and companies or their groups. They customize probationary terms to meet unique business needs. Often, CLAs (Collective Labor Agreements) provide terms fairer to employees than standard law requirements.

Tailoring through CLAs

CLAs outline the length, exit rights, and specific terms of probationary periods. This ensures probationary times fit the unique needs of different sectors. For example, in the technology field, CLAs may allow longer probationary terms. This considers the complicated nature of tech jobs and the need for careful evaluation. Conversely, retail sector CLAs might set shorter trial terms. This shows the unique work and employment methods within retail.

Sector-Specific Regulations

The effect of CLAs on probationary periods varies across areas. This allows for fair and useful probationary terms, matched with real work conditions. In tech, longer times account for job complexity, while in retail, shorter periods match the sector’s characteristics. By setting sector-specific rules, CLAs balance company and employee goals, ensuring fairness and job relevance.

What does the Dutch law say about ending a job during the probationary period?

During this key time, both the worker and the boss have clear rights and rules. Employees should get a good chance to show their skills and see if they fit well in the company. They need proper help to understand their job. Employers should set clear goals and give useful comments. This time let both sides check if the job match is good. They can end the job without the normal notice, but only for fair reasons, not for things like health or union actions.

When it’s okay to end the job

You can end a job during this time for fair reasons. As an employer, it’s not okay to end it for health problems, pregnancy, or union work. Ending a job should be done with care. The person should know why, to help them grow. Even though the law allows stopping jobs quickly during this time, employers should think about the worker’s future.

Dutch law on ending probationary periods

The changes have also made the rules around stopping a probationary term simpler. Employers need a good reason for any layoff during this time. This is to avoid any unfair dismissals and ensure that terminations are legal. It’s about making sure that stopping work during probation is fair and justified.

Recent Changes in Dutch Employment Law Since 2015

Dutch employment law has changed greatly since 2015, focused on probationary periods and contracts. The introduction of the Work and Security Act (Wet Werk en Zekerheid, WWZ) marked a critical change. This act tried to balance employer freedom with employee security. It tried to clarify job rules, making the workplace fairer for all.

Modifications to Probationary Periods

Changes to probationary time lengths stand out among these changes. Now, for permanent jobs, the cap is two months. For terms less than two years, it’s one month. This change helps employers rate new hires while protecting employee rights. It’s a step towards balancing different working wants.

Collective Labor Agreements’ Impact

Collective Labor Agreements (CLAs) have a strong effect on probationary terms. They can set durations that go beyond the usual limits, as long as they help workers. This flexibility lets different areas change probation terms to their unique needs. It’s a way to ensure that both companies and workers get fair terms.

For companies, adapting to these changes meant a full review of contracts and probation terms. They had to ensure their methods aligned with the new rules. This often meant updating HR rules, particularly those linked to employment. Employees have seen better rules around trial periods and contracts since these changes. They now enjoy better job security and understand their rights and tasks better during probation. It’s a move towards more transparent and secure work methods.

Expert Advice for Navigating Dutch Employment Law

Understanding Dutch employment law, especially around probationary times, is important for both companies and workers. This part offers useful advice to help companies set up probationary periods that meet with the law and guide workers on how to handle these times successfully.

For Employers: Setting up compliant probationary periods

Legal limits knowledge is key: Always start by making sure you’re up to date with the law limits for trial terms in the Netherlands. Your contracts should accurately show these lengths.

Clarity in contracts: It’s crucial to have clear, straightforward terms stated in your job contracts regarding probationary times. This includes defining the length, expectations, and reasons for termination.

Check collective agreements: If your field is covered by a Collective Labor Agreement, review it. These deals can have specific rules for probationary times that you’ll need to follow.

Open communication: Keep the lines of communication open with new workers. Clearly explain what you expect from them during the trial time to avoid any misunderstanding.

Prepare for termination: If you need to end a job contract during the probationary time, ensure you have a solid reason that meets with the law. This method will help keep transparency and fairness.

For Employees: Understanding Your Rights

Be informed about your rights: You should know your rights regarding probationary periods, including the maximum probationary period duration in the Netherlands and the legal grounds for removal during this period.

Deal review: Carefully review your job deal before signing. Pay special attention to any terms related to the trial time to ensure they are fair and clear.

Clarify standards: Don’t fear to ask your boss about their standards for you during the probationary time. Understanding these standards can help you focus on meeting them.

Know the termination conditions: Familiarize yourself with the conditions under which your job may be ended during the probationary time. This information is important for protecting your rights.

Seek legal advice when necessary: If you’re unsure about any parts of your probationary time or if you feel your rights are being infringed upon, getting legal advice is a smart step. Being proactive about your rights and duties is important.

By following this advice, managers can ensure their probationary periods are fair and within legal limits, while workers can handle these periods with a clear knowledge of their rights and responsibilities. This shared understanding is key to a good work relationship in the Netherlands.

Final Thoughts

We’ve studied the basics of Dutch employment law, focused on probationary periods, contracts, and the impact of Collective Labor Agreements. Key takeaways include the specific lengths for probationary periods, the impact of CLAs, and the fair conditions under which employment can be ended during probation. These factors are crucial for both managers and workers to understand, ensuring a fair and open working relationship.

The Value of Legal Advice

The complexities of Dutch employment law show the need for expert legal help. Both employers and workers benefit greatly from consulting legal experts. This step is crucial for handling the law’s nuances successfully. Legal experts can provide guidance, ensuring all parties are well-informed about their rights and tasks. This advice is key to navigating Dutch employment law successfully, helping to build strong, fair work relationships.

Frequently Asked Questions

What are the conditions for a probationary term in the Netherlands?

In the Netherlands, if a company wants a probationary term, they must include it in the written job contract. This probationary time has a maximum length of two months for regular jobs or longer fixed-term contracts. For shorter fixed-term contracts, the rules are tighter, sometimes not even allowing a trial period.

Can a probationary time be deemed void, and under what circumstances?

Yes, sometimes a trial term might not be valid. This happens if it wasn’t put in the written contract or if the company stopped the contract for an unfair reason (like discrimination).

How does the length of a probationary time change for set and non-fixed-term contracts?

The length of a probationary term varies on the kind of contract. For fixed-term contracts that last two years or less, the trial time can only be a maximum of one month. If a fixed-term contract is six months or shorter, it can’t have a trial time at all.

What changes happened in Dutch work law regarding probation terms since January 2015?

Since 2015, Dutch work rules changed. Now, if your contract is fixed-term and shorter than six months, you can’t have a trial time.

How does a Collective Labor Agreement impact the rights of partners during a trial period?

Sometimes a company might be part of a Collective Labor Agreement – this is like a special contract for a whole group of workers. This deal might change the rules about probationary terms, like making them shorter or adding extra conditions compared to the usual Dutch job laws.